RACHEL MADDOW, HOST: I’m here to report that there is nothing wrong in the state of Wisconsin. Wisconsin is fine. Wisconsin is great, actually. Despite what you may have heard about Wisconsin’s finances, Wisconsin is on track to have a budget surplus this year.

I am not kidding. I’m quoting their own version of the Congressional Budget Office, the state’s own nonpartisan "assess the state’s finances" agency. That agency said the month that the new Republican governor of Wisconsin was sworn in, last month, that the state was on track to have a $120 million budget surplus this year.

So, then why exactly does Wisconsin look like this right now?

(VIDEO CLIP PLAYS)

MADDOW: Why is there a revolt in the American Midwest tonight? Why are we in day three of massive, massive protests -- real upheaval in Wisconsin’s capital city of Madison? Why are we seeing what was described today by my friend John Nichols, a seventh-generation Wisconsinite, as perhaps the biggest protests that have been seen in that state since Vietnam? Why is this -- look at this -- why is this happening?

As the state’s own finances show, it is not happening because people who work for the state are the cause of some horrible budget crisis. It’s not because teachers are lazy and rich. It’s not because greedy snowplow drivers have bankrupted the state somehow.

The state is not bankrupt. Even though the state had started the year on track to have a budget surplus -- now, there is, in fact, a $137 million budget shortfall. Republican Governor Scott Walker, coincidentally, has given away $140 million worth of business tax breaks since he came into office.

Hey, wait. That’s about exactly the size of the shortfall.

What is happening in Wisconsin right now has absolutely nothing to do with public workers. The headline here, the way this keeps getting shorthanded, is workers angry after state is forced by budget crisis to crack down.

That’s not what’s going on. The state is not being forced to crack down. A lot of states do have budget crises right now, but heading into this year, Wisconsin was not one of them.

There is, indeed, a projected deficit that required attention, and Walker and GOP lawmakers did not create it. [...]

The confusion, it appears, stems from a section in [Director of the nonpartisan Legislative Fiscal Bureau Robert] Lang’s memo that -- read on its own -- does project a $121 million surplus in the state’s general fund as of June 30, 2011.

But the remainder of the routine memo -- consider it the fine print -- outlines $258 million in unpaid bills or expected shortfalls in programs such as Medicaid services for the needy ($174 million alone), the public defender’s office and corrections. Additionally, the state owes Minnesota $58.7 million under a discontinued tax reciprocity deal.

The result, by our math and Lang’s, is the $137 million shortfall.

It would be closer to the $340 million figure if the figure included the $200 million owed to the state’s patient compensation fund, a debt courts have declared resulted from an illegal raid on the fund under former Gov. Jim Doyle.

A court ruling is pending in that matter, so the money might not have to be transferred until next budget year.

So, contrary to what Maddow and many in the media including on MSNBC have been claiming, Wisconsin does indeed have a budget deficit.

And what about that tax cut Maddow and others in the press have been focusing so much attention on? Well, they've been misrepresenting that as well:

The tax cuts will cost the state a projected $140 million in tax revenue -- but not until the next two-year budget, from July 2011 to June 2013. The cuts are not even in effect yet, so they cannot be part of the current problem.

Amazing. Politifact concluded:

There is fierce debate over the approach Walker took to address the short-term budget deficit. But there should be no debate on whether or not there is a shortfall. While not historically large, the shortfall in the current budget needed to be addressed in some fashion. Walker’s tax cuts will boost the size of the projected deficit in the next budget, but they’re not part of this problem and did not create it.

We rate Maddow’s take False.

Nice job, Rach. Your employers must be so proud of you.

But Maddow wasn't alone in presenting this lie. Her colleague Ed Schultz did it Friday evening:

Governor Scott Walker wants you to believe that the only way he can solve his made-up budget crisis is by taking away union rights. He says if he raises taxes on the wealthy, jobs will die and businesses will leave Wisconsin. That, my friends, is an old, outright lie.

And here's the proof. The previous governor, Democrat Jim Doyle, was handed a $3.2 billion deficit when he took office. But he passed a budget that left the state poised for a surplus this year.

Maybe Politifact should bust him as well.

(H/T NB reader Carl Gullang)

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